Twenty bankers from National Australia Bank have been sacked or have left the lender for breaching its policies when issuing 2300 home loans, including some that may be based on false information.

NAB on Thursday said it had also disciplined a further 32 staff for failing to follow its strict policies when writing the loans, which mainly went to foreign buyers of Australian property.

In the latest example of misbehaviour in the banking industry, NAB said that in 2015 it became aware of the problematic mortgages, many of which were sold via "introducers" – people outside the bank who collect a fee for referring a customer.

NAB said some of the loans may have been submitted without accurate information about the customers, which could include incorrect documents such as payslips.

NAB's chief customer officer for consumer banking and wealth, Andrew Hagger, said there were also instances where bankers had accepted information provided by the introducers, rather than the customers themselves.

"It's the banker's role to accept information from the customer. It's not the banker's role to accept information from the introducer," Mr Hagger said.

The lender was taking the matter "very seriously," Mr Hagger said, and it is now contacting all customers with the 2300 loans to check the accuracy of the bank's information.

"There's no question that there was bad behaviour involved here," he said.

"I have made clear, not just in this circumstance, but across the bank that processes are there to be followed. And we have no tolerance for bankers not following processes. There are consequences when bad behaviours occur, and those consequences depend on the actual circumstances."

NAB said that as a result of the review, 20 bankers in NSW and Victoria had either been terminated, or were no longer employed by the bank. A further 32 had faced "consequences", including pay cuts.

Mr Hagger, who started running the retail banking part of NAB last year, signalled there had also been consequences for some managers.

"There are some individuals who were involved in reporting lines who are either no longer with NAB or didn't receive bonuses," he said.

"What occurred was unacceptable. We have investigated this matter thoroughly, and, as we have always said, whenever we find issues we will investigate them, fix them, and hold people to account – and we did."NAB's Andrew Hagger

The misconduct follows a string of scandals in Australia's banks over recent years, and a recent debate about how thoroughly banks verify the information provided by customers.

A September report by investment bank UBS cited survey data that showed only 67 per cent of respondents had been "completely accurate" in their mortgage application but had still been approved for a loan. The authors argued this suggested Australian banks held up to $500 million in "liar loans," or those based on false information.

NAB may need to pay compensation to affected customers if they were given excessive credit, but the bank has not estimated how much this may cost it.

The 2300 home loans account for about 0.4 per cent of loans written during the period, NAB said.

NAB has written to affected customers, requesting they participate in a review of their loan. It told the Australian Securities and Investments Commission about the problems in late 2015, and said it was engaging with the regulator to ensure the program was fair to customers.

Banks' referral fees are typically about 0.2 to 0.5 per cent of a mortgage. In recent years NAB has tightened up its processes for these payments, so they can be made only to people involved in financial transactions, such as real estate agents or financial advisers.

In recent years, all the major banks have also tightened or ended mortgage lending to overseas borrowers buying Australian real estate.

This story was published by: http://www.smh.com.au Author: Clancy Yeates